MUMBAI: In a mammoth cost-cutting move, the $11.5 billion media & entertainment major Viacom has axed close to 850 of its employees across all divisions of the company. This accounts for approximately seven percent of its total workforce.
About 100 jobs were cut at Viacom’s Hollywood movie studio Paramount Pictures. However, the deepest cuts came at Viacom’s largest division – MTV Networks, which includes MTV, Nickelodeon, VH1 and Comedy Central channels.
These reductions are across the studio: accounting, business/legal affairs, corporate and government affairs, home entertainment, human resources, information technology, production, studio lot operations and Vantage.
What’s more, due to the worldwide economic slowdown, the company has also put a lid of the pay of some senior executives. Additionally, salary increments of the senior level management are also being suspended for 2009.
"We are moving rapidly to adapt to the challenges presented by the current economic environment. The changes we are making in our organization and processes will better position Viacom to navigate the economic slowdown and generate sizable efficiencies that will help us drive our business as the marketplace stabilizes and conditions improve," Viacom president and CEO Philippe Dauman said in a statement.
In India, Viacom has inked a 50:50 joint venture with Raghav Bhal’s Television Eighteen (TV18) for television, film and digital media content. The JV company is called Viacom18 and houses Studio18, MTV, Nick, Vh1, and Hindi general entertainment channel Colors. Additionally, Viacom18 also runs Viacom’s consumer products business in India. It remains unclear whether this development will have its ripple effects in India too.
Viacom has under its umbrella Paramount Pictures, MTV Networks, BET Networks, Comedy Central amongst others. The company is of the view that the restructuring will result in a charge of $ 400-450 million against its Q4 results. The company expects the cost-cutting to result in savings of $ 200-250 million in 2009.
The company’s profits were down 37 per cent in the last quarter and the share price is down over 60 per cent this year.